The Manufacturing Sector: Growth Story of India

INDIA’S FDI INFLOWS DOMINANT IN THE SERVICES SECTOR 14 Sectoral Share of FDI (INR Crore)

134,080

208,564

127,789

76,783

63,961

66,621

41,254

146,981

54,656

74,645

8,438

24,216

99,252

118,728

91,683

87,731

106,784

70,465

14,357

15,253

11,205

7,407

11,438

90,740

121,223

36,751

33,004

84,449

39,899

48,218

60,751

70,367 140,985 150,465 198,143 153,112 178,996 152,792 289,704 161,767

59,593

59,069 14,390 41,906

39,741

14,390

2008 2009 2010 201 1

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022**

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020 2021

2022 **

Service Sector

Manufacturing Sector

Other*

Source: DPIIT Statistics

Foreign Direct Investments (FDI) plays an important role in bringing-in the crucial capital for value-creation in any sector. According to the World investment Report 2022 of United Nations Conference on Trade and Development (UNCTAD) 15 , India is counted among the top (ranked 7) FDI destinations globally. Having said that, much of this healthy FDI inflows goes into fueling growth within the services sector. A likely reason for the higher share of services sector could be because doing business in the services sector in India is less complicated than doing business in the manufacturing space. During the period of 2011-14 the share of FDI for manufacturing averaged around 60% of total FDI inflows, largely coinciding with the announcement of National Manufacturing Policy in 2011. In the subsequent years, the exuberance somewhat stabilized, and the share of manufacturing averaged around 28% during 2015-2022. 16 Within the manufacturing sector, FDI has been concentrated in industries such as computer, electronics hardware, automotive, and machinery.

14 * Others sector includes agriculture, utility, logistics, etc. | ** The FDI Inflow of 2022 is till December 2022 | 15 UNCTAD – World Investment Report 2022 16 Press Information Bureau – FDI Inflow in India

16

Cushman & Wakefield

The Manufacturing Sector Growth Story of India

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